Key shareholders at the International Monetary Fund (IMF) have called on Kenya to formally request an in-depth IMF assessment of corruption and governance.
According to the IMF bosses, the move will address concerns that could impact the country’s economic stability.
Further, the anonymous shareholders who spoke to Reuters, explained that this will also allow Kenya to unlock lending that has been stalled by the contentious tax hikes.
By initiating the review, Kenya will also demonstrate its commitment to transparency and accountability.
IMF indicated that the disbursement of around $600 million (Ksh77.1 billion) under a plan that expires next year has been held up since the government withdrew the Finance Bill in 2024 in June.
The Bill would have led to a Ksh346.9 billion in tax increases but was withdrawn in response to mass protests.
Also Read: Govt Close to Agreeing New Ksh192.7 Billion Loan After IMF Delays
Why IMF Shareholders Want Kenyans to Call for Review
According to the two diplomatic sources, Western governments have been advocating for Kenya to go through a governance diagnostic or an IMF assessment focusing on corruption and governance vulnerabilities.
However, they stated that the assessment has to be formally requested by Kenya.
One of the sources noted that this step could pave the way for renewed discussions regarding further IMF financial support.
The IMF has been conducting governance diagnostic assessments since 2014, with reports published in 14 countries, including Ukraine, Cameroon, and Sri Lanka.
The purpose of these reports is to assess governance weaknesses, especially around corruption, and to provide recommendations for improving transparency and accountability.
In addition, the assessments are considered a critical step in fostering good governance practices and can help countries unlock financial support from the IMF by demonstrating a commitment to reform.
Also Read: IMF Issues Update on New Policies After Fall of Finance Bill 2024
Next Steps After Finance Bill
After a six-day visit to Kenya, an IMF staff team has issued an update on the formation of policies that will manage financial challenges in the country.
According to the IMF, discussions held with the Kenyan government revolved around policies and reforms to address the subsequent evolving economic and fiscal challenges.
“The Kenyan authorities and IMF staff had productive discussions on the authorities’ policies and reforms to address the evolving economic and fiscal challenges,” said Team leader Haimanot Teferra.
Haimanot Teferra has said that the IMF is on track and is supporting Kenya in identifying a set of policies that could support the completion of the reviews under the ongoing program and partnerships.
Follow our WhatsApp Channel for real-time news updates!
https://whatsapp.com/channel/0029VaB3k54HltYFiQ1f2i2C
